[USA] NC Supreme Court rules Duke won’t foot $9B coal ask cleanup bill, shareholders may still pay half

On December 11, 2020, the North Carolina Supreme Court ruled that Duke Energy and its shareholders will not have to bear the full brunt of the coal ash cleanup costs.[1] In January 2020, Duke reached a settlement with environmental groups that requires the utility to excavate a total of 124 million pounds of coal ash from Duke’s coal plant sites over the next 10 to 15 years.[2] Duke estimates the total cost of the cleanup to cost $8-9 billion. Duke has repeatedly said that absorbing these costs would likely weaken its balance sheet.[3] The CEO has also said the company would be unwilling to reach a settlement with environmentalists on whether the utility can profit from the cleanup.

The NC Supreme Court decision partially upholds the North Carolina Utilities Commission’s (NCUC), the government agency that regulates utilities in the state, initial ruling that coal ash costs should be included in the cost of service used to establish the utilities’ retail rates, essentially putting the cost on Duke’s ratepayers. The NCUC’s decision was challenged by the state’s attorney general who argued that Duke should bear the costs of the cleanup and filed a brief in the NC Supreme Court to appeal the decision. The court also ruled that the NCUC should reconsider its rejection of North Carolina Public Staff’s “equitable sharing” proposal. The NC Public Staff’s, which helps consumers resolve disputes with utility companies, proposal would split the cost of cleanup between ratepayers and shareholders and extend the timeline for paying off the costs, but would not allow the utility to profit from the cleanup. The court's ruling does not mean the NCUC has to implement the NC Public Staff’s proposal, only that the commissions needs to consider "all potentially relevant facts."

[1] https://appellate.nccourts.org/opinions/?c=1&pdf=39826

[2] https://www.southernenvironment.org/news-and-press/news-feed/n.c-settlement-results-in-largest-coal-ash-cleanup-in-america

[3] https://www.utilitydive.com/news/uncertainty-over-earnings-return-for-8b-north-carolina-coal-ash-cleanup-we/583267/

[USA] House Democrats release new proposal to address climate crisis

On June 20, 2020, Democrats in the House Select Committee on the Climate Crisis released a comprehensive proposal called the Climate Crisis Action Plan which establishes a goal of reaching net-zero greenhouse gas (GHG) emissions in the United States by 2050; directs the president to set ambitious interim targets to meet or exceed that goal; and calls for achieving net-negative GHG emissions after 2050.[1] The report recommends investments in infrastructure; investments in clean energy and decarbonization technologies; and decarbonization of the transportation and electricity sectors. The report does not directly recommend an end to natural gas fracking or coal-fired power. It also leaves the door open for carbon capture technology and nuclear power to play a role in a net zero-carbon grid.

The majority staff for the Select Committee previewed its draft policy recommendations with Energy Innovation: Policy and Technology LLC (Energy Innovation), a nonpartisan think tank. Energy Innovation modelled the emissions reductions and co-benefits from implementing a subset of the Select Committee’s recommendations. According to Energy Innovation, the Select Committee majority staff’s policy recommendations will set the country on a path to achieving net-zero greenhouse gas emissions by 2050.

[1] https://climatecrisis.house.gov/sites/climatecrisis.house.gov/files/Climate%20Crisis%20Action%20Plan.pdf

[USA] EPA rule change to save 4 coal plants across Pennsylvania and West Virginia

On April 9, 2020, the U.S. Environmental Protection Agency (EPA) updated its Mercury and Air Toxics Standards (MATS) to assist four struggling coal plants in Pennsylvania and West Virginia.[1] The coal plants burn low-quality coal refuse—waste abandoned from mining and burning coal. Under Obama-era MATS standards these plants did not meet acid gas hazardous air pollutant emissions standards, but the new rule creates a subcategory for these plants. This particular change to MATS is not likely to have a major environmental impact because of its limited scope.

According to the Anthracite Region Independent Power Producers Association (ARIPPA), a group that represents the coal refuse-to-energy industry across West Virginia and Pennsylvania, there are more than 5,000 abandoned mines across Pennsylvania that were never reclaimed, totaling between 200 million and 8 million cubic yards of waste.[2] One remediation solution for the problem, burning waste into energy, became viable in the late 1970s through the Public Utility Regulatory Policies Act (PURPA), which sought to diversify the country’s electric resource profile. Since 1987, more than 212 million tons of coal refuse have been removed in Pennsylvania alone, but the coal plants are now struggling as their economic viability has declined. Without the rule change, two of the four plants affected would have likely closed by the end of May.

[1] https://www.epa.gov/mats/regulatory-actions-final-mercury-and-air-toxics-standards-mats-power-plants

[2] https://arippa.org/wp-content/uploads/2018/12/ARIPPA-Coal-Refuse-Whitepaper-with-Photos-10_05_15.pdf

[USA] Trump administration slashes required annual fuel economy increase to 1.5%

On March 31, 2020, the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) issued a final rule that weakens Obama-era fuel efficiency guidelines by requiring corporate average fuel economy (CAFE) and carbon emissions standards to increase 1.5% from 2021 to 2026 rather than 5% annually.[1] The EPA and NHTSA estimate the rule will reduce the sticker price of new cars by about $1,000, but consumers can still, by choice, buy more efficient vehicles.

The March rule is phase two of the Safer Affordable Fuel-Efficient (SAFE) rules. The first phase, issued in fall 2019, revokes states' authority to issue their own fuel standards, specifically targeting California’s fuel standards which are considered to be the biggest driver of electric vehicle (EV) deployment. In September 2019, 23 states including California sued the Trump Administration over the rule.[2] Automakers are split in their support of the lawsuit and California’s standards. Ford, Honda, BMW and Volkswagen support states' rights to set their own standards, but GM, Toyota, and Fiat Chrysler have sided with the Trump Administration's push for a single national standard. The lawsuit is currently pending, and advocates expect litigation on the second rule as well.

[1] https://www.nhtsa.gov/press-releases/safe-final-rule

[2]https://oag.ca.gov/system/files/attachments/press_releases/California%20v.%20Chao%20complaint%20%2800000002%29.pdf

[Japan] Keidanren Launched the Challenge Zero Initiative

On December 12, 2019, Keidanren (also known as the Japan Business Federation), in cooperation with the Japanese Government, announced the launch of the Challenge Zero Initiative. The Initiative will support innovations to build a zero-carbon society; promote Environmental, Social, and Governance (ESG) investments; and facilitate collaboration among the private sector, government, and academic institutions.

Keidanren is an economic organization that represents a membership comprised of 1,376 domestic companies, 109 nationwide industrial associations, and 47 of Japan’s regional economic organizations.[1]

The launch of the Challenge Zero Initiative was driven by the Japan's Long-term Strategy under the Paris Agreement, issued by the Japanese Cabinet in June 2019, which declared that Japan would seek to become a “decarbonized society” by 2050.[2] Keidanren has noted that since the Long-term Strategy under the Paris Agreement was issued, the Japanese business community has realized that more concrete and ambitious actions would be needed to create innovation in order to pursue a low-carbon society.

The Challenge Zero Initiative asks participating companies and organizations to commit to one or more of the goals set by the Initiative and to report their activities to achieve their commitments. The goals include promoting disruptive innovation for net-zero-carbon technologies, demonstrating and deploying those technologies; and financing companies that make low-carbon commitments. Keidanren plans to provide more detailed information on the Challenge Zero Initiative to member companies and organizations soon.[3] [4]

[1] https://www.keidanren.or.jp/profile/pro001.html

[2] https://www.env.go.jp/press/106869.html

[3] https://www.keidanren.or.jp/journal/times/2019/1212_02.html

[4] https://www.keidanren.or.jp/policy/2019/109.pdf

［USA］New Bill Introduced in Georgia Legislature Would Require Companies to Treat Coal Ash Like Municipal Solid Waste

A new bill—H.B. 756— that would require disposal of coal ash or combustion residuals (CCR) to be as rigorous as municipal solid waste (MSW) was introduced by Rep. Robert Trammell (D) in the Georgia legislature on January 14, 2020.[1] In December 2019, Georgia became the second state allowed the U.S. Environmental Protection Agency to run its own coal ash permitting program which will allow the state flexibility in how it cleans up the toxic waste. Georgia Power's current plans for closing its ash sites includes leaving CCR in unlined ponds. By contrast, MSW in Georgia is disposed in landfills with both bottom liners and collections systems for leachate.

Recently, concerns over the risk of groundwater contamination have grown and a number of states have mandated coal ash cleanup. North Carolina, for example, ordered Duke Energy to excavate roughly 72.5 million metric tons of CCR.[2] There has been no such order in Georgia, though a 2018 report on the coal-fired power plants in the state found that groundwater was contaminated near all but one site.

[1] http://www.legis.ga.gov/Legislation/20192020/187853.pdf

[2] https://news.duke-energy.com/releases/duke-energy-north-carolina-regulators-and-environmentalists-reach-agreement-to-permanently-close-all-remaining-ash-basins-in-north-carolina

[USA] “EEI Launches Industry-Wide Environmental, Social, Governance, and Sustainability Reporting Template”

(EEI, 27 August 2018)

The Edison Electric Institute will launch an “environmental, social, governance, and sustainability-related (ESG/sustainability) reporting template;” this report is the first and only one of its kind.  It is based on voluntary reporting of both quantitative (i.e. governance methods and strategies) and qualitative data (i.e. portfolio, emissions, capital expenditures, and resources). Through this report, electricity customers can be better informed on their utility’s status in these areas. EEI’s member electric companies will also benefit as each company’s financial sector will be provided with more standardized and consistent ESG/sustainability information. Tom Kuhn, EEI’s President” said that the pilot form of this report (released in December 2017) was “well-received by investors, key stakeholders, and customers.” JPMorgan Chase’s Deputy Global Head of Sustainable Finance also applauded EEI’s efforts and stated that “as ESG goes mainstream, the disclosure template will help lenders, investors, and EEI member companies engage on the most important ESG and sustainability matters for the electric power industry.”